Bloodbath in Gaza continued unabated on Sunday with Israeli jets pounding the coastal strip, even as the fragile peace process got a new lease of life with Palestinian negotiators saying they have accepted an Egyptian proposal for a new 72-hour truce with Israel.

"We are here to look for an agreement. We cannot have an agreement without talks, so we accepted an Egyptian proposal to have a cease-fire for 72 hours in order to resume the talks," a Palestinian negotiator said. The decision was confirmed by other Palestinian negotiators as well, Al Arabiya reported.

It was not yet known as to when the ceasefire would come into effect as there was no response from the Israeli side. The Palestinian decision came after Israel said it was prepared for a protracted military action in Gaza and would not return to Egyptian-mediated "negotiations under fire".

The Palestinian decision could pave the way for renewed negotiations with Israel on a long-term durable truce in the Gaza Strip. Earlier, Palestinian negotiators said they would leave if Israel did not attend without preconditions.

"If the Israelis do not come, we will leave to consult with our leadership," said Izzat Al-Risheq, a member of the Palestinian negotiation team. "We gave our demands to the Egyptian delegation seven days ago. We have not have received any official response yet."

Prime Minister Benjamin Netanyahu on Sunday said Israel will not return to talks while Palestinian militants continue cross-border rocket attacks.

"Israel will not engage in negotiations under fire, and will continue to act in every way to change the current reality and to bring quiet to all of its citizens," he told a cabinet meeting at the defence ministry in Tel Aviv. Meanwhile, hostilities have continued unabated since the collapse of the three-day truce on Friday with the Israeli military hitting 150 targets, killing 15 people, and Palestinian militants firing more than 100 rockets into Israel.

The Israeli air force struck at least 20 targets in Gaza overnight. There was no let up in violence with a 17-year-old boy killed in an Israeli strike on central Gaza, medics said. Tensions have also been growing in the West Bank where protesters clashed with Israeli troops.

A 11-year-old Palestinian boy was shot dead by Israeli troops in a refugee camp in the southern West Bank on Sunday. Over a month of bloody fighting has killed more than 2,000 Palestinians and 67 in Israel, most of them soldiers. About 10,000 people have been injured in the conflict.